Karnataka excise policy: Liquor license fees hiked by 50% instead of 100%, validity extended

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The Karnataka government has scaled back its proposed 100% increase in liquor excise licence renewal fees to a 50% hike, bowing to pressure from sellers and craft producers. The revised rates, effective from July 1, come alongside a key industry concession: licences will now be valid for five years instead of one, ANI reported.

The climbdown follows fierce opposition to the initial doubling of fees announced on 15 May, which was projected to add Rs 600–700 crore annually to state coffers. Stakeholders, including the Karnataka Liquor Sellers’ Association, had lobbied for a milder 20–25% increase.

Under the new system, renewal fees will vary depending on the area’s population. Metro corporations with over 20 lakh residents will pay Rs 9 lakh per year, while other metropolitan areas will face a Rs 7.5 lakh fee. Municipal corporations are set at Rs 6.75 lakh and towns, municipalities and town panchayats will pay Rs 6 lakh. Fees for other regions will be determined based on local population figures.

According to ANI, the changes affect over 13,000 licence holders in the state. It marks the first fee revision since 2016 as previous attempts were shelved due to industry protests.

The state has also updated fees for other categories. Distillery and brewery licences will now cost Rs 1.5 lakh annually, up from Rs 1 lakh, while craft breweries and fortified wine producers will pay Rs 25,000 per year. Distillery and warehouse fees have been set at Rs 67 lakh and bars at international airports will now pay Rs 18.75 lakh annually.

These adjustments are expected to generate an additional Rs 300 crore in yearly revenue for the government.

As per ANI, B Govindaraja Hegde of the Liquor Sellers’ Association welcomed the five-year licence validity, calling it a "fulfilled demand", but noted sellers had sought instalment-based payments, a request still under consideration.